Walmart Inc (WMT)

Cash conversion cycle

		Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020
Days of inventory on hand (DOH)	days	40.88	44.53	48.08	39.03	41.10
Days of sales outstanding (DSO)	days	4.95	4.74	5.28	4.25	4.38
Number of days of payables	days	42.31	42.30	47.02	42.67	43.45
Cash conversion cycle	days	3.52	6.97	6.34	0.61	2.03

January 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 40.88 + 4.95 – 42.31
= 3.52

The cash conversion cycle of Walmart Inc has shown variability over the past five years. In January 2024, the company's cash conversion cycle decreased to 3.52 days compared to an increase in the previous year. This indicates that Walmart is efficiently managing its cash flow and working capital to convert inventory into cash more quickly.

In contrast, in January 2023 and January 2022, Walmart experienced a longer cash conversion cycle, at 6.97 days and 6.34 days respectively. This suggests that the company may have faced challenges in managing its working capital efficiently during those periods.

Notably, in January 2021, Walmart had a significantly shorter cash conversion cycle of 0.61 days, indicating a very efficient cash conversion process. This may have been due to effective inventory management and quick conversion of inventory into sales and cash.

In January 2020, Walmart's cash conversion cycle increased to 2.03 days, showing a slight deterioration compared to the previous year. However, it remained relatively low, indicating efficient cash management practices.

Overall, Walmart Inc's cash conversion cycle has shown some fluctuations in recent years, but the company has generally demonstrated effectiveness in managing its working capital and cash flow to convert inventory into cash efficiently.